The time has arrived when you must be busy evaluating your taxable income. The income tax that one has to pay depends on the tax slab under which he or she falls. Interestingly the tax slabs are different as per your gender, so you need to be watchful of that as well. The tax slabs are changed at the time of budget announcement in February every year.

The Income Tax Act has categorized all income tax payers into 3 different types that include Ordinary Individuals, Female Citizens and Senior Citizens. The modified tax slab for the current fiscal (2008-09) stand as:

Taxable Income Slab

Tax Rates

Surcharge

Education Cess

Upto Rs 1.5lakh (Ordinary Citizen)

Upto Rs 1.8 lakh (Female Citizens)

Upto Rs 2.25 lakh (Senior Citizens or above 65 years of age)

Nil

Nil

Nil

Rs 1.5 lakh upto Rs 3 lakh

10%

Nil

3% on tax

Above Rs 3 lakh upto Rs 5 lakh

20%

Nil

3% on tax

Above Rs 5lakh upto Rs 10 lakh

30%

Nil

3% on tax

Above Rs 10 lakh

30%

10% on tax

3% on tax

The surcharge and the education cess are levied on the tax payable computed after considering the deduction under various sections of the income tax act.

For instance an individual has an annual income of Rs 6 lakh. His home loan interest payment is Rs 1,20,000 and his home loan principal repayment is Rs. 80,000. He has also paid a LIC premium of Rs. 20,000 and has bought a health insurance policy for himself worth Rs 10,000. At the same time investment of Rs 50000 is made on NSC and has also donated Rs 20,000. Let us now calculate his tax liability based on the slab.